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New Uniform, Same Team Culture: Allied World Post-Fairfax Deal

Lou Iglesias took on a bigger role at Allied World late in the second quarter, moving from president of North American operations to CEO of Global Insurance.

Executive Summary

At about the same time as Lou Iglesias quietly took the reins of Global Insurance without any formal public announcement, Allied World was capturing headlines externally, with Toronto-based Fairfax Financial Holdings Ltd. closing a $4.9 billion deal to acquire all of Allied World. Iglesias described the impacts of the Fairfax deal in an interview with Carrier Management.
Coming soon in CM magazine: A culture of responsive risk takers sets Allied World apart from larger competitors, according to Iglesias, who explains that the recent organizational change, creating a Global Insurance operation, will help him—as CEO of the worldwide segment—to ensure that the culture is consistent around the world.

In an interview with Carrier Management a few months later, Iglesias discussed the benefits of the organizational change that wasn’t announced publicly and the impact of more widely reported news: the $4.9 billion acquisition of Allied World by Fairfax.

While the marketing materials of the 16-year-old company now say, “Allied World: A Fairfax Company,” little else has changed, Iglesias confirmed.

“Their operating companies run independently. That was their commitment, and they’ve lived up to every word of that,” Iglesias said, referring to Fairfax Chair and CEO Prem Watsa and his team. “We’re not merging with other Fairfax companies. You’re not seeing us sit at a table to decide who’s in and who’s out. That is not happening.”

What is the benefit of the deal for Fairfax?

Allied World is “a midsized company operating in a large account world,” Iglesias said. “We were successful” already, he said, attributing the company’s ability to compete against commercial lines heavyweights to a responsive culture. (See related article, “Allied World’s Cultural Edge: Competing With Giants to Grow Specialty Business,” in Carrier Management’s fourth-quarter print magazine.) “But we didn’t have the huge balance sheet. If any Fortune 500 customers had that worry in the past, it’s gone now,” he said. “We were never Berkshire Hathaway. We were never AIG. We were never Zurich. We never wanted to be. Now, we have this big balance sheet behind us, which I think helps.”